Covid-19 and the subsequent restriction have spurred the rapid adoption of digital banking — a trend that is expected to continue as new technologies and products improve options for customers.
According to research by Boston Consulting Group (BCG) in 2020, the expectations of consumers across the UAE in the banking sector are rapidly evolving, even more so with the pervasiveness of the Covid-19 crisis. More than 53 per cent of UAE banking customers increased mobile banking usage during the pandemic and over 50 per cent enrolled in digital banking for the first time because of the crisis.
At National Bank of Fujairah, the transition to digital that started before the pandemic is now accelerating, making digital the preferred choice for consumers, says Colin Dallas, Head of Retail Banking. "We are digitally transforming and investing in new products and services for digital-savvy clients to increase efficiencies and broaden customer base."
The unprecedented challenges, as a result of the pandemic, have significantly accelerated the demand for banking channels that offer convenient, seamless and uninterrupted banking services.
The bank’s tech overhaul, which is part of a digital strategy dating back to 2015, has already resulted in lower transaction costs, improved operational efficiency through automation and optimization, and a substantial increase in remote banking. Moreover, customers are conducting a wide range of their day-today banking activities, such as applying for cards and financing or paying bills via digital channels.
“The unprecedented challenges, as a result of the pandemic, have significantly accelerated the demand for banking channels that offer convenient, seamless and uninterrupted banking services," says Colin.
To date, more than 70 per cent of the bank’s customers have transitioned from traditional to online banking, and in some processing areas more than 90 per cent of transactions are now fully automated.
"We are also seeing a steady increase in transactions on our electronic channels. More than 86 per cent of outward remittances is now initiated through digital channels," adds Colin.
Rise of virtual banking
In a region, where banks often pride themselves on the size of their branch networks, customers are increasingly leaning towards digital transaction/online banking. National Bank of Fujairah is transforming its branch network in the UAE and investing in new products and services for clients. Its NBF Virtual Teller Machine (VTM) allows customers to connect one-to-one with a live teller through real-time video, allowing them to virtually complete any transaction that can be made within a branch while still receiving the personalised service.
Because of the digital push, cash deposits at branches have dropped to 45.6 per cent from more than 65 per cent earlier in the first nine months of last year.
"Smart branches are the need of the hour. What I foresee in the near future is the rise of virtual banks, which leverage virtual reality and augmented reality technologies combined with AI-powered data," says Colin.
He also adds that “despite the push towards transforming the branch network, NBF will never stop providing the in-branch human experience, branches will always act very important in terms of an access point for its customers. Personal relationship services for customers that require assistance for more complex financial services will be always available. Technology will just further transform and improve the in-branch banking experience.”
With much of the world shifting online due to Covid-19, the bank rolled out a number of new products in 2020. This included Emirates Digital Wallet, which was launched last year under its trade name, Klip. It marked a major milestone in the UAE's push towards a cashless future, enabling person-to-person payments via mobile phones. The project is expected to eliminate 60-70 per cent cash in circulation, according to estimates. The rollout of Klip is expected to accelerate the use of digital solutions in place of cash and open a wealth of related services for the unbanked. NBF is at the forefront of the country’s initiatives to become a cashless society as the UAE looks towards the future.
NBF was part of another initiative, eDirham Instant, designed to transition the UAE to a truly cashless society. It is a digital payment method that allows customers to securely pay for governmental fees and services.
The Covid-19 pandemic and the resulting economic slowdown have had a major impact on small and medium enterprises (SMEs) globally. SMEs are the backbone of the UAE economy, contributing about 52 per cent of the country’s non-oil gross domestic product, according to an estimate by the Ministry of Economy in December 2019.
To support SMEs and aid their growth and recovery, NBF developed an innovative new platform called NBF Connect. Co-created with SMEs, the one-stop shop, with partners including Etisalat and Visa, provides a host of features, including easy access to the SME community, business banking and digital services.
Through NBF Connect, our aim was to digitise the SME community and provide them with resources at their fingertips that allows them to not just operate in a new climate, but truly grow and develop even further,” says Colin.
The push towards digital meant NBF displayed a high level of resilience despite the significant impact of Covid-19 in 2020. Testament to its steady growth in the digitalisation journey and significant overhaul of its Internet Banking NBF was recently awarded the ‘Most Innovative Emerging Technology Implementation’ title at the MEA Finance's Banking Technology Awards 2021 - a remarkable success for being the region’s first bank to roll out a centrally authenticated internet banking platform with advanced features, improving customer experience and security.
“Our continued investment in digitalisation and innovation will ensure that the bank continues to deliver differentiated customer service and cost efficiency and at the same time create new sources of business development for future growth,” says Colin.